Along with my colleagues, Houston attorneys Michael Doyle and Jeff Raizner, I filed an injury case here in Portland in federal court today for a group of Oregon National Guard soldiers against KBR, Inc., a private contractors. The soldiers were exposed to sodium dichromate while serving in Iraq in 2003. The compound contains a very toxic component, hexavalent chromium. The exposure problems have been widely reported in The Oregonian by reporter Julie Sullivan.

Our soldiers face a long road ahead. It is honor to represent them. Here is the link to a copy for anyone interested in the Complaint: complaint-and-demand-for-jury-trial-filed

David Sugerman

Christmas came early for current and former Wal-Mart employees with this good news. Wal-Mart has agreed to settle 63 wage and hour claims pending in various courts. Wal-Mart will pay between $350 million and $640 million to settle the pending cases. No word yet on how much any employee will receive. The settlements must still be approved by judges overseeing the various cases. Critics of Wal-Mart have long questioned whether it achieves its low prices at by chipping employees. Still, it’s a good day when a company steps up to do what is right–no one who works for wages should have to endure the death by a thousand paper cuts of small illegal wage deductions for work performed. The case illustrates the importance of wage and hour class actions. Employees who face illegal employment practices often can’t afford to pursue their small claims. But when those small claims are bundled into a class action, a company that makes money by chipping its employees can be forced to face up to a huge day of reckoning. That’s apparently what happened here. David Sugerman

Guess they’re through licking their wounds over their electoral losses earlier this month. The Chamber of Commerce is back with its tired screeds about the “costs” of lawsuits.  According to the Chamber, the “lawsuit industry is booming.” I’m sure that has nothing to do with the Chamber’s role in federal deregulation. As well, I’m sure that the various market and consumer frauds that led to the financial collapse would have nothing to do with why there might be more litigation.

The Chamber can’t have it both ways.  If it wants dergulation, then it must accept that lawsuits will happen when deregulated actors cross various lines. On the other hand, if it truly wants less lawsuits, then the Chamber should welcome regulation as the alternative approach. But arguing against both regulation and lawsuits can mean only one thing: The Chamber insists that American business should answer to no one. I think our current financial crisis explains exactly why “neither” is a bad choice.

David Sugerman

At first glance, this prediction bodes well for consumers. As reported here in the Seattle Post-Intelligencer, Congress will move to add Wall Street financiers to the list of those who will be held accountable for funding predatory mortgages.

The technical term is assignee liability. It’s important to understand the underlying concept because it plays a big part of what’s gotten us to the present crisis.  Banks were writing ridiculous and nasty mortgages and lending money to borrowers who had no business taking on mortgage commitments.

The banks and lenders would then group and package the bad loans into large pools, and through a series of sales and transactions, parts of these large groups of stinking bad loans wound up being traded like baseball cards on Wall Street. Actually, that’s a little unfair because for reasons beyond my comprehension, baseball trading cards actually have “value.” But I digress.

For years, the Bush Administration and the Free Marketeers (AKA “The Smartest People in the Room”) opposed rules that would allow asignee liability. To their way of thinking, buyers of the stinking bad loans should never, never, never have to answer to the borrower who may have been duped or otherwise wronged by the predatory loans.

The new rules would allow the borrower to chase the assignee, the Wall Street purchaser of the stinking horrible loans. It makes sense for a number of reasons, not the least of which is that our Wall Street purchasers are the recipients of socialist handouts.  Yes, Senator McCain and Senator Martinez, I used that very word to describe the Wall Street bailout…if you want to accuse your rivals of importing socialism into American life, you best go back and explain that whole bailout thing. Ugh, better have more coffee–or less–as I’m digressing again.

But here’s the real disappointment of the Seattle PI report. This is all about the future and prevention. Not a bad thing to be sure, but it’s a deafening silence about THIS round of problems. The Bush Administration declared class warfare on the middle class when they tried to limit the bailout to Wall Street and banking failures. Consumers were left in the drink without a boat, without a paddle, and without a life jacket.  So you’re talking about assignee liability in the future.  And in the meantime, consumers are supposed to ???

David Sugerman

I’m not a big fan of the U.S. Chamber of Commerce. For years, they’ve led a concerted effort to bar the courthouse doors for ordinary Americans.  And now we learn that the Chamber is at the center of the deregulation frenzy that led to the Wall Street financial collapse.  Among the many points of interest:

• U.S. Chamber received  some $23 million (through a foundation) paid by AIG to lobby for changes in regulatory oversight
• The same U.S. Chamber champions the $700 billion bailout (Query: How much is that really going to cost us?)
• The U.S. Chamber used “tort reform” as the wolf-in-sheep’s-clothing approach to strip away post-Enron reforms.

Look at this video where the Chamber begs and bullies for the bailout.  Against the backdrop of their responsibility, this is goofy.  Shameless.

David Sugerman

For those interested in the Comcast late fee litigation here in Oregon, a quick update. After winning the preliminary battle in the trial court and Court of Appeals, we returned to the trial court for discovery on class action certification. (I’m compressing several years into a few lines here.)

Backstory: In the case, plaintiffs–Comcast customers–claim that Comcast illegally billed late fees. They want to pursue the case as a class action and obtain refunds of illegally billed late fees, plus interest and attorney fees. For what it’s worth, Comcast denies that it did anything wrong and is arguing that the case is not appropriate for class action treatment.

The parties briefed the question of whether the court should certify a class action and recently, I appeared in court to argue plaintiffs’ motion to certify the class action. Multnomah County Circuit Court Judge Baldwin heard argument for an hour and a half. He had a number of questions. After the hearing, he sent a letter to the attorneys asking for additional briefing and scheduling further argument. We’ll be back in front of Judge Baldwin for more argument in early December after we complete the next round of briefing.

For those who keep score, Tim Quenelle, my co-counsel, and I filed the case in 2004. The fight over the arbitration clause took two-plus years, and it looks like the class certification proceedings will run about the same length.  No one said it would be easy. But of course, we’re not giving up.

David Sugerman

For years, Airborne Health touted Airborne as a cold prevention remedy. This Washington Post article reports on the Federal Trade Commission’s settlement of false advertising claims against the manufacturer. According to the story, the company agreed to refunds of up to $30 million dollars settlement to dispose of the false advertising claims.

Bad enough that Airborne was raking in money by the tanker-load on false claims. But if that wasn’t enough, the CEO blames consumer lawyers for the company’s woes.  From the article: “A class-action lawsuit sparked this matter. We’re just one of many major consumer brands across America that are under assault by class-action lawyers.”

The Post article quotes Stephen Gardner, director of Center for Science in the Public Interest.  Steve is one of the country’s top consumer lawyers, and CSPI has done its usual top-notch job here. Curious that Steve and the FTC and other consumer lawyers would get the blame. Steve Gardner didn’t choose to make false claims in advertising the product. Neither did the FTC.  But let’s not let facts get in the way.

Seems to me that consumers have the right to know that they’re buying something real when they spend money on a product.  If the manufacturer chooses to falsely advertise its products, it’s only fair and proper that they pay the price.

David Sugerman

Came across this reality-based post about culinary schools from a restaurant trade insider at Austin Cantina in Seattle. It could have been written about Career Education Corp.’s (CEC) Western Culinary Institute.  Close. Actually, the author was talking about CEC’s California Culinary Academy and he was doing so in the context of a skeptical view of CEC’s new Seattle culinary program.

By way of full disclosure, I am one of the lawyers handling the proposed class action against CEC and Western Culinary Institute here in Oregon. Apart from that, I appreciate the reality view of the restaurant kitchen biz in the Austin Cantina post. Posts like this should be required reading for everyone bitten by CEC’s hype about becoming America’s next big food star.   If you’re thinking about culinary school, look carefully.  Some of the programs are great ways to get into the trade. But there are downsides with many of the programs, including profoundly expensive tuition that leaves graduates swimming in debt and unable to pay back loans with low-paying jobs available to most graduates.

David Sugerman

Great news. Another juror from the recent Craig Berkman trial contacted me following the most recent post about the Berkman case.  Jim served as the presiding juror. He is properly proud of the hard work that he and his colleagues did on the case. He’s apparently been following the thread on this case, and he weighed in with the following:

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I saw your blog posting about total damages and wanted to comment. The chicken scratch on the verdict form is mine – I was the presiding juror.

If you add up the amounts in questions 8, 9 and 19, the amount that the jury intended to award in economic or compensatory damages totaled $30,514,921. Note that’s separate from the $23M+ awarded against Arthur Anderson. And separate from the $15M in punitive damages awarded the following day.

But for reasons I don’t fully understand, the court interpreted some of the numbers differently and came up with a lower total number for the damages. This was despite two questions of clarification that were submitted to Judge Hodson during deliberations (and answered in what appeared to be a clear and concise manner). Many of the jurors were upset about that, particularly given it may have made Arthur Anderson look “more guilty” than Craig Berkman because the reported amount of damages against Anderson was more than Berkman. Further confusing the issue is that different amounts were reported in different news sources. Candidly, if we had known that the $30M total would be reduced, this probably would have affected the amount of punitive damages awarded.

Of course, this is probably a moot point given Mr. Berkman claims that he, personally, and his companies are millions in debt and it’s questionable how much the victims will end up receiving.

***

More from David: Jim is referring to the verdict form that is posted in this entry.

Jim-As with your colleague in her earlier post, it’s apparent that you and the other jurors served attentively and worked hard to do the right thing in this case.  Once again, it shows the strength and integrity of the Oregon jury system. Kind of makes me proud to be part of this thing.  Thanks so much for sharing your experience with us.  Even though I have no connection to your case, I want to thank you and your colleagues for your service.

David Sugerman

I got a polite but fairly annoyed letter note from Craig Berkman’s lawyers last week about how I had made false and disparaging comments about Mr. Berkman in an earlier post on this blog. After some back and forth, counsel supplied me with a copy of the verdict form. It’s here: berkman-trial-signed-verdict-form for those geeky enough to want to read.

It’s been an interesting back and forth with Mr. Berkman’s lawyers. On one level, correction is the right thing to do, as I always strive to be accurate. But it also raised a host of other questions. Had I not corrected the post, I imagine that I would perhaps have been sued for defamation.

The law of defamation is one of those special areas taught briefly to law students. It’s all about injury to reputation by false statements. The thing about someone claiming defamation is that you have to show–among other things–that the false statement damaged the plaintiff’s reputation. Always an interesting question.

The mistake I made in the post–since corrected–is that I talked about the fraud trial and the amount awarded. By the time the case got to trial, the fraud claim had been removed. Thus, the jury did not consider fraud and did not make a finding. There were, however, claims for conversion, which means intentionally taking property that isn’t yours and using it for your own benefit, and for negligent misrepresentation. But there was no claim for fraud.

I also got wrong the amount awarded against Mr. Berkman, implying in one place that it was $36 million, where I explain later in the original post that the amount was split between the defendants. That was just sloppy drafting on my part.

Anyway, my apologies to my readers for passing on bad information and to Mr. Berkman and his attorneys, as it’s not my intention to provide inaccurate reports. Hope this sets the record straight.

David Sugerman